Sprint: Dish’s Clearwire Bid Is Illegal
Dish made the offer on May 29 in the hopes that Dish could outbid Sprint, which had previously offered $3.40 a share for Clearwire. Clearwire’s board was set to vote on the competing offers, but after Dish upped its bid last week Clearwire decided to postpone the vote until June 13 on the hopes that Sprint would make a higher counter-offer. Clearwire said that Dish’s latest offer was “more actionable” than the company’s previous bids.
Sprint fired back with a letter to Clearwire’s board, saying that Dish’s offer broke an existing shareholder agreement. “Sprint will enforce its legal and contractual rights,” Daniel R. Hesse, the company’s Chief Executive Officer, wrote in the letter. “Thus, the Dish proposal is not actionable.” Among Sprint’s complaints were Dish’s proposed power to designate 3 board members and veto some Clearwire transactions. ”Many Clearwire stockholders appear to be under the mistaken belief that Dish’s proposal is a viable alternative to the Sprint merger agreement, and this is simply not the case,” Sprint said in the letter.
This development is only the latest in a drama involving Sprint, Dish, Clearwire, and Japanese telecommunications company SoftBank that has been playing out in recent months. Sprint and Dish have both been trying to acquire Clearwire, while Dish and SoftBank have been in a bidding war over Sprint. Dish wants to acquire a cell phone network operator in order to make use of its wireless spectrum holdings.
Sprint, which is the number 3 wireless provider in the country, already owns 50 percent of Clearwire and wants to purchase the rest of the company to help expand its networks. A numer of minority shareholders in Clearwire believe that Sprint’s bid is too low, but even if Sprint loses the bid it still stands to own 65 percent of the company through previous agreements with majority shareholders.
Clearwire’s board is going to continue to review the Dish offer, but still recommends Sprint’s bid, the company said in a statement. Dish did not immediately respond to the accusations in Sprint’s letter.
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